Ukraine open for business - Business news

Business news from the Ukrainian League of Industrialists and Entrepreneurs

EUROPE FORMALIZES EUR1.8 BLN ASSISTANCE TO UKRAINE

BRUSSELS. April 15 (Interfax-Ukraine) – The European Commission’s (EC) proposal for new macro-financial assistance (MFA) worth EUR 1.8 billion to Ukraine was adopted on April 15, the EC has announced.

It was formalized with the signatures of President of the European Parliament Martin Schulz and of Zanda Kalniņa-Lukasevica, Parliamentary State Secretary for the European Affairs of Latvia, on behalf of the Latvian Presidency of the Council.

This follows the European Parliament’s positive vote and a Council agreement on the new proposal.

According to the EC, the EU and Ukraine will now have to agree on a Memorandum of Understanding.

The Commission says it hopes to conclude this process in the coming weeks, in order to allow for the disbursement of a first tranche of EUR 600 million before the summer break.

The new MFA comes on top of what the EU is already contributing via the State Building contract in terms of humanitarian, project, and technical assistance.

It will also be the third MFA program for Ukraine since 2010. In the course of 2014, the Commission disbursed EUR 1.36 billion under the previous MFA program, with a final tranche of EUR 250 million under MFA 1 to be disbursed this month.

Together, the three MFA operations to Ukraine amount to EUR 3.41 billion, which represents the largest financial assistance to a third country in such a short time.

EXPORTS IN FEB 2015 EXCEED IMPORTS BY $135.9 MILLION – STATISTICS

KYIV. April 15 (Interfax-Ukraine) – The State Statistics Service of Ukraine in February 2015, for the first time since September 2014, recorded a surplus in foreign trade with goods, totaling $135.9 million, while in February 2014 the deficit was $117.8 million.

Exports in February 2015 fell by 35.9% year-over-year, to $2.933 billion and imports decreased by 40.3%, to $2.857 billion.

In January and February 2015, exports of goods fell by 33.7% year-over-year, to $5.973 billion, and imports dropped by 37%, to $5.866 billion, with the surplus being $106.7 million compared to a deficit of $300.9 million.

The service said that Russia’s share of exports fell from 17.8% in January-February 2014 to 10.1% in January-February 2015, and its share of imports fell from 29.4% to 16.5%.

The share of supplies to Turkey grew from 6.4% to 7.7%, to China – from 5.5% to 7.4%, to Egypt from 5.9% to 6.7%, Italy from 5.2% to 5%, the Netherlands from 2.3% to 3.6%, Germany from 3% to 3.5% and the share of supplies to Poland did not change, being 5.4%.

The share of Hungary of total imports grew from 1.9% to 6.4%, Germany from 7.7% to 10.9%, China from 9.6% to 11.3%, Poland from 4.7% to 5.2%, the United States from 3.4% to 4%, France from 2.6% to 3%, while from Belarus they fell from 5.9% to 5.7%.

As reported, data from the State Statistics Service differs from data presented by the National Bank of Ukraine, which take into account informal trade. According to the NBU, Ukraine’s deficit of foreign trade with goods in February was $551 million, which is 23.5% down on February 2014. Exports fell by 34.1%, to $3.157 billion, while imports – by 41.7%, to $3.708 billion.

The NBU said that in January-February 2015, Ukraine’s deficit of foreign trade with goods was $979 million, which is 36% down year-over-year: exports fell by 32.5%, to $6.237 billion and imports dropped by 33%, to $7.216 billion.

SOME 400 PARTICIPANTS COULD VISIT INTERNATIONAL SUPPORT FOR UKRAINE CONFERENCE

KYIV. April 15 (Interfax-Ukraine) – Around 400 representatives of different foreign delegations will attend the International Support for Ukraine Conference scheduled to be held in Kyiv on April 28, Head of the conference organization committee and Economic Development and Trade Minister of Ukraine Aivaras Abromavicius has said.

“The goal of the conference is to show to our western partners that reforms are going on in our country, and there is a mood for reforms and we have a clear plan towards reforming the country,” he said.

He said that the conference is intended to show the unity of Ukrainian authorities in their plans to conduct reforms.

Ukrainian President Petro Poroshenko, Ukrainian Prime Minister Arseniy Yatseniuk, Ukrainian Verkhovna Rada Chairman Volodymyr Groysman, and every Ukrainian minister are due to take part in the conference.

Abromavicius said that Ukraine expects that the foreign delegations to participate in the one plus three format: head of the government or state and three profile ministers.

Representatives of the European Bank for Reconstruction and Development (EBRD), World Bank and International Monetary Fund (IMF) have been invited to take part in the conference.

It is planned to discuss the financing of eastern regions of Ukraine which have suffered from the ongoing conflict, business climate issues, and aid for displaced persons.

NBU GOVERNOR SAYS EQUILIBRIUM ACHIEVED ON FOREX MARKET, PRECONDITIONS CREATED FOR ITS LIBERALIZATION

Kyiv, April 14 (Interfax-Ukraine) – The National Bank of Ukraine has said that the foreign exchange market has stabilized in recent weeks and that they started working on the gradual removal of restrictions on foreign exchange transactions in line with the commitments under the new program of cooperation with the International Monetary Fund (IMF).

“There are grounds to speak about the achievement of equilibrium on the foreign exchange market… That’s why the National Bank has noted the existence of prerequisites for liberalization of the market and easing some restrictions,” the NBU press service quoted the central bank’s governor, Valeriya Gontareva, as saying at a weekly meeting with bankers on Tuesday.

She recalled that on April 10, 2015, the NBU canceled the requirement of the obligatory use of letters of credit to import certain vitally important goods (oil, petrol, diesel fuel, drugs for hemodialysis and treating patients) for transactions under direct contracts with producers, and military goods.

According to first deputy head of the NBU Oleksandr Pisaruk, the National Bank within two or three months will finish the process of cleansing the banking system, and will then proceed to the structural stabilization of the market. “The regulator is working on a plan for the gradual removal of restrictions on foreign exchange transactions… In particular, all restrictions on the withdrawals from customers’ bank accounts, which were introduced in 2014-2015, will be gradually removed,” he said.

Gontareva added that such steps of the regulator should help restore citizens’ confidence in banks and will be “a point of reboot” for the banking system.

RADA INTRODUCES TEN-YEAR MORATORIUM ON ROUND TIMBER EXPORTS

KYIV. April 14 (Interfax-Ukraine) – The Verkhovna Rada has introduced a ten-year ban on the export of timber and lumber in its raw form (round timber), while a ban on word exports (except for pine) will be introduced from November 1, 2015, and that for pine trees – from January 1, 2017.

All in all, 233 deputies voted for the adoption of the bill at second reading and as a whole.

The law provides for the introduction of a ten-year ban on the export from Ukraine of timber and lumber in its raw form, in particular, round timber with the transport humidity being above 22%, as well as lumber with thickness exceeding 70 mm with a similar transport humidity.

While presenting the bill for second reading, the chairman of the committee on industrial policy and entrepreneurship Viktor Halasiuk said that the law eliminates the monopoly of the central executive authority on issuing certificates – they will now also be issued by forestries, permanent forest users, and a single electronic register will be introduced that will allow certificates to be traced.

He said that the wording of the bill has been agreed with timber processing enterprises and forestry establishments, as well as the Embassy of Poland, which “is one of the main interested parties – they will plant their plants.”

BORYSPIL AIRPORT POSTS 9% RISE IN PASSENGER TRAFFIC IN MARCH

KYIV. April 14 (Interfax-Ukraine) – Boryspil International Airport (Kyiv), Ukraine’s largest airport, in March, and for the first time since the beginning of 2015, recorded an increase in passenger traffic by 9% compared to March 2014, to 459,300 passengers.

The airport’s press service told Interfax-Ukraine that in particular, in March it served 421,000 passengers on international routes and 38,300 on domestic routes.

“However, the amount of flights from the airport was 7% less than in the same period last year – 5,171 flights, of which 4,638 international and 533 domestic,” the press service said.

The average occupancy of aircraft in March 2015 was 71%, in March 2014 the average figure was 61%, and on some routes occupancy was between 30-40%.

In general, in the first quarter of 2015 the airport’s performance fell: in January-March it served 1.348 million passengers, which is 7% less than in the same period in 2014.

It served 1.242 million passengers on international flights during this period, and 105,861 on domestic flights.

The number of flights fell by 16%, to 14,983.